Running Head: STARBUCKS’ GLOBAL EXPANSION STARBUCKS’ GLOBAL EXPANSION 5 Starbucks’ Global Expansion Tabatha Hall-Politte January 19, 2020 The Success of Starbucks Both technology and globalization have an astounding effect on businesses. Globalization refers to the process through which companies expand to an extent where their operations become global. This is usually made possible by technological advancement that takes place day after day. In many ways, technological advances and globalization can affect business in both positive and negative ways. A Background of Starbucks An example of a company that has been profoundly affected by both technology and globalization is Starbucks. The company has managed to take a simple product and miraculously made it a lifestyle. Time is gone when people would take coffee only in the morning to get their dose of caffeine needed for the day. Currently, people drink coffee for the mere fun of it, any time of the day. All this revolution is attributed to Starbucks (Nair & Weber, 2017). When buying a cup of coffee, customers are not just buying coffee; they are buying an experience. For instance, they could be looking for the strong coffee smell, the rich taste of the specific variety that they purchase, and a laid-back atmosphere. Starbuck’s customers clearly understand the difference any other brand of coffee and the experience that they derive from Starbuck’s coffee. Though it’s an American firm, Starbucks has been embraced by people from all over the world, regardless of the language that they speak. Originally, the firm started as a small store in Pike Place Market, Seattle. As at now, the firm has operations in over 50 countries and over 15,000 stores. Since 1971, the company has been providing one of the world’s most exquisite beverage to any consumer willing spend a good amount on a cup of coffee. It didn’t take sheer luck for Starbucks to become a market leader (Rizqiyanto, 2017). They have risen to the top by making strategic acquisitions, protecting a name that they have fought hard to protect and ensuring that they are differentiated from their competitors. Starbucks’ Global Expansion   Globalization is vital for the success of any company, and Starbucks is not an exception. Though the company was successful in its home country, the company leaders still saw the need to expand their operations to global markets to fully utilize their potential. In 2003, Starbucks embarked on an aggressive expansion process that is attributable for the growth of the company to its current worldwide status that we know of today (Nair & Weber, 2017). Globally, consumers began experiencing what would be referred to as the “Starbucks Effect”, which refers to the emergence of rivals that come with better, and more impressive business models that make firms to reevaluate the viability of their business ideas.          As technology and globalization have helped to place Starbucks at the intern ...

1. Running Head: STARBUCKS’ GLOBAL EXPANSION
STARBUCKS’ GLOBAL EXPANSION 5
Starbucks’ Global Expansion
Tabatha Hall-Politte
January 19, 2020
The Success of Starbucks
Both technology and globalization have an astounding
effect on businesses. Globalization refers to the process through
which companies expand to an extent where their operations
become global. This is usually made possible by technological
advancement that takes place day after day. In many ways,
technological advances and globalization can affect business in
both positive and negative ways.
A Background of Starbucks
An example of a company that has been profoundly
affected by both technology and globalization is Starbucks. The
company has managed to take a simple product and
miraculously made it a lifestyle. Time is gone when people

2. would take coffee only in the morning to get their dose of
caffeine needed for the day. Currently, people drink coffee for
the mere fun of it, any time of the day. All this revolution is
attributed to Starbucks (Nair & Weber, 2017). When buying a
cup of coffee, customers are not just buying coffee; they are
buying an experience. For instance, they could be looking for
the strong coffee smell, the rich taste of the specific variety that
they purchase, and a laid-back atmosphere. Starbuck’s
customers clearly understand the difference any other brand of
coffee and the experience that they derive from Starbuck’s
coffee.
Though it’s an American firm, Starbucks has been
embraced by people from all over the world, regardless of the
language that they speak. Originally, the firm started as a small
store in Pike Place Market, Seattle. As at now, the firm has
operations in over 50 countries and over 15,000 stores. Since
1971, the company has been providing one of the world’s most
exquisite beverage to any consumer willing spend a good
amount on a cup of coffee. It didn’t take sheer luck for
Starbucks to become a market leader (Rizqiyanto, 2017). They
have risen to the top by making strategic acquisitions,
protecting a name that they have fought hard to protect and
ensuring that they are differentiated from their competitors.
Starbucks’ Global Expansion
Globalization is vital for the success of any company, and
Starbucks is not an exception. Though the company was
successful in its home country, the company leaders still saw
the need to expand their operations to global markets to fully
utilize their potential. In 2003, Starbucks embarked on an
aggressive expansion process that is attributable for the growth
of the company to its current worldwide status that we know of
today (Nair & Weber, 2017). Globally, consumers began
experiencing what would be referred to as the “Starbucks
Effect”, which refers to the emergence of rivals that come with
better, and more impressive business models that make firms to

3. reevaluate the viability of their business ideas.
As technology and globalization have helped to place
Starbucks at the international level, the firm has experienced
several problems. These problems have either originated
internally from the firm’s business model or externally from
overseas competition. Globally, rival coffee shops came up.
Some copied Starbucks’ name, business practices and the firm’s
logo (Shaburishvili, 2017). To counter this, Starbucks applied
intellectual property laws to do away with the confusion that
customers encountered in differentiating itself from rivals.
The Industrial Organization Model and the Resource-based
Model
The industrial operations model uses an external approach
to explain that external forces outside the organization have the
greatest influence on the strategic actions of a firm (Rizqiyanto,
2017). This model is based on the following assumptions; the
external environment imposes constraints and pressures that
dictate its strategic actions that lead to superior returns, most
firms that compete in the given market have similar control on
relevant factors of production, high mobility of resources in the
market, and, the rationality of decision-makers.
Being a big firm, Starbucks can make use of the industrial
organization model to ensure that it controls a huge chunk of
market share in the highly segmented market. In this economic
model, Starbucks can outdo its rivals using advertising
information, reducing production and transaction costs and
forming strategic alliances (Shaburishvili, 2017). In addition to
this, Starbucks can engage in deliberate acts that help to keep
the competition pool small and create barriers that make it hard
for new entrants to penetrate the market. Through this model,
Starbucks should to try to maintain a strong foothold in the
industry.
The resource-based model refers to an internal perspective
that explains how the internal capabilities and resources of a

4. firm can serve as an enabling factor for earning above-average
profits. This model is founded on the assumption that the firm is
a collection of unique capabilities and resources that serve as
the primary basis for formulating strategy and source of income.
The second assumption is that, over time, the firm puts efforts
to acquire and develop unique capabilities and resources so as
to stay strategically competitive. Finally, this model assumes
that resources are not highly mobile across firms (Voigt, Buliga
& Michl, 2017). Starbucks should apply this model to evaluate
its capabilities and resources. This is because resources and
capabilities are two core factors that determine the strategic
appropriateness of the firm’s actions. The capabilities and
resources of Starbucks are rare, valuable, costly to imitate and
hard to substitute. If the company manages to safeguard its
resources and capabilities, it stays competitive and good at what
it does.
Vision Statement and Mission Statement
The mission of Starbucks is “to inspire and nurture the
human spirit – one person, one cup and one neighborhood at a
time.” The vision of the company is to “treat people like family,
and they will be loyal and give their all.” The mission and
vision of Starbucks highlight the emphasis of the firm to lead
the coffeehouse market (Voigt, Buliga & Michl, 2017). The
firm’s mission indicates what Starbucks does so as to target its
customers. The mission statement of Starbucks is focused on the
philosophical purpose of the firm. Starbucks vision statement
indicates what it desires to achieve in future. In a nutshell, the
vision statement is focused on placing the firm in a position
where it’s the market leader (Ziliani, 2019). The vision and
mission statements of Starbucks are clear, concise and inspiring
in terms of maintaining premier status in the coffee industry.
Role of Stakeholders in Success of Starbucks
The main stakeholders for Starbucks are; employees,
suppliers, customers, investors, the environment, and

5. governments. Starbucks’s employees play a critical role in the
success of the company by ensuring that they have effective
communication skills and that they have the ability to take
customer orders accurately. The staffs are highly enthusiastic
towards working. Suppliers ensure that the supply chain of
Starbucks is sustainable (Ziliani, 2019). The farmers that supply
Starbucks with coffee beans adhere to high standards which
ensure that they are of the same flavor and quality. Starbucks’s
investors play a critical role in funding the opening of new
stores in new markets. In addition to this, investors ensure that
they provide funds for research and development which
consequently ensure that Starbucks keeps making new
inventions (Rizqiyanto, 2017). Environmental factors such as
weather, political stability and favorable financial conditions
have provided a conducive environment for Starbucks to
achieve global success. Finally, governments play an essential
role in formulating policies that encourage the operations and
expansion of Starbucks.
References
Nair, A., & Weber, T. (2017). borjo coffeehouse: Franchise,
Independence, and Starbucks. Entrepreneurship Theory and
Practice, 41(5), 861-875.
Rizqiyanto, S. (2017). Starbucks's Fair Trade in the Edge of
Globalization. Etikonomi, 16(2), 231-248.
Shaburishvili, S. (2017). The peculiarities of inclusive business
development under globalization. Globalization & Business.

6. Voigt, K. I., Buliga, O., & Michl, K. (2017). Globalizing Coffee
Culture: The Case of Starbucks. In Business Model Pioneers
(pp. 41-53). Springer, Cham.
Ziliani, C. (2019). GETTING LOYALTY RIGHT: BARILLA
AND STARBUCKS. Loyalty Management: From Loyalty
Programs to Omnichannel Customer Experiences, 18.
Running Head: STARBUCKS’ GLOBAL EXPANSION
STARBUCKS’ GLOBAL EXPANSION 5
Starbucks’ Global Expansion
Tabatha Hall-Politte
January 19, 2020
The Success of Starbucks
Both technology and globalization have an astounding
effect on businesses. Globalization refers to the process through
which companies expand to an extent where their operations
become global. This is usually made possible by technological
advancement that takes place day after day. In many ways,

7. technological advances and globalization can affect business in
both positive and negative ways.
A Background of Starbucks
An example of a company that has been profoundly
affected by both technology and globalization is Starbucks. The
company has managed to take a simple product and
miraculously made it a lifestyle. Time is gone when people
would take coffee only in the morning to get their dose of
caffeine needed for the day. Currently, people drink coffee for
the mere fun of it, any time of the day. All this revolution is
attributed to Starbucks (Nair & Weber, 2017). When buying a
cup of coffee, customers are not just buying coffee; they are
buying an experience. For instance, they could be looking for
the strong coffee smell, the rich taste of the specific variety that
they purchase, and a laid-back atmosphere. Starbuck’s
customers clearly understand the difference any other brand of
coffee and the experience that they derive from Starbuck’s
coffee.
Though it’s an American firm, Starbucks has been
embraced by people from all over the world, regardless of the
language that they speak. Originally, the firm started as a small
store in Pike Place Market, Seattle. As at now, the firm has
operations in over 50 countries and over 15,000 stores. Since
1971, the company has been providing one of the world’s most
exquisite beverage to any consumer willing spend a good
amount on a cup of coffee. It didn’t take sheer luck for
Starbucks to become a market leader (Rizqiyanto, 2017). They
have risen to the top by making strategic acquisitions,
protecting a name that they have fought hard to protect and
ensuring that they are differentiated from their competitors.
Starbucks’ Global Expansion
Globalization is vital for the success of any company, and
Starbucks is not an exception. Though the company was
successful in its home country, the company leaders still saw

8. the need to expand their operations to global markets to fully
utilize their potential. In 2003, Starbucks embarked on an
aggressive expansion process that is attributable for the growth
of the company to its current worldwide status that we know of
today (Nair & Weber, 2017). Globally, consumers began
experiencing what would be referred to as the “Starbucks
Effect”, which refers to the emergence of rivals that come with
better, and more impressive business models that make firms to
reevaluate the viability of their business ideas.
As technology and globalization have helped to place
Starbucks at the international level, the firm has experienced
several problems. These problems have either originated
internally from the firm’s business model or externally from
overseas competition. Globally, rival coffee shops came up.
Some copied Starbucks’ name, business practices and the firm’s
logo (Shaburishvili, 2017). To counter this, Starbucks applied
intellectual property laws to do away with the confusion that
customers encountered in differentiating itself from rivals.
The Industrial Organization Model and the Resource-based
Model
The industrial operations model uses an external approach
to explain that external forces outside the organization have the
greatest influence on the strategic actions of a firm (Rizqiyanto,
2017). This model is based on the following assumptions; the
external environment imposes constraints and pressures that
dictate its strategic actions that lead to superior returns, most
firms that compete in the given market have similar control on
relevant factors of production, high mobility of resources in the
market, and, the rationality of decision-makers.
Being a big firm, Starbucks can make use of the industrial
organization model to ensure that it controls a huge chunk of
market share in the highly segmented market. In this economic
model, Starbucks can outdo its rivals using advertising
information, reducing production and transaction costs and

9. forming strategic alliances (Shaburishvili, 2017). In addition to
this, Starbucks can engage in deliberate acts that help to keep
the competition pool small and create barriers that make it hard
for new entrants to penetrate the market. Through this model,
Starbucks should to try to maintain a strong foothold in the
industry.
The resource-based model refers to an internal perspective
that explains how the internal capabilities and resources of a
firm can serve as an enabling factor for earning above-average
profits. This model is founded on the assumption that the firm is
a collection of unique capabilities and resources that serve as
the primary basis for formulating strategy and source of income.
The second assumption is that, over time, the firm puts efforts
to acquire and develop unique capabilities and resources so as
to stay strategically competitive. Finally, this model assumes
that resources are not highly mobile across firms (Voigt, Buliga
& Michl, 2017). Starbucks should apply this model to evaluate
its capabilities and resources. This is because resources and
capabilities are two core factors that determine the strategic
appropriateness of the firm’s actions. The capabilities and
resources of Starbucks are rare, valuable, costly to imitate and
hard to substitute. If the company manages to safeguard its
resources and capabilities, it stays competitive and good at what
it does.
Vision Statement and Mission Statement
The mission of Starbucks is “to inspire and nurture the
human spirit – one person, one cup and one neighborhood at a
time.” The vision of the company is to “treat people like family,
and they will be loyal and give their all.” The mission and
vision of Starbucks highlight the emphasis of the firm to lead
the coffeehouse market (Voigt, Buliga & Michl, 2017). The
firm’s mission indicates what Starbucks does so as to target its
customers. The mission statement of Starbucks is focused on the
philosophical purpose of the firm. Starbucks vision statement
indicates what it desires to achieve in future. In a nutshell, the

10. vision statement is focused on placing the firm in a position
where it’s the market leader (Ziliani, 2019). The vision and
mission statements of Starbucks are clear, concise and inspiring
in terms of maintaining premier status in the coffee industry.
Role of Stakeholders in Success of Starbucks
The main stakeholders for Starbucks are; employees,
suppliers, customers, investors, the environment, and
governments. Starbucks’s employees play a critical role in the
success of the company by ensuring that they have effective
communication skills and that they have the ability to take
customer orders accurately. The staffs are highly enthusiastic
towards working. Suppliers ensure that the supply chain of
Starbucks is sustainable (Ziliani, 2019). The farmers that supply
Starbucks with coffee beans adhere to high standards which
ensure that they are of the same flavor and quality. Starbucks’s
investors play a critical role in funding the opening of new
stores in new markets. In addition to this, investors ensure that
they provide funds for research and development which
consequently ensure that Starbucks keeps making new
inventions (Rizqiyanto, 2017). Environmental factors such as
weather, political stability and favorable financial conditions
have provided a conducive environment for Starbucks to
achieve global success. Finally, governments play an essential
role in formulating policies that encourage the operations and
expansion of Starbucks.

11. References
Nair, A., & Weber, T. (2017). borjo coffeehouse: Franchise,
Independence, and Starbucks. Entrepreneurship Theory and
Practice, 41(5), 861-875.
Rizqiyanto, S. (2017). Starbucks's Fair Trade in the Edge of
Globalization. Etikonomi, 16(2), 231-248.
Shaburishvili, S. (2017). The peculiarities of inclusive business
development under globalization. Globalization & Business.
Voigt, K. I., Buliga, O., & Michl, K. (2017). Globalizing Coffee
Culture: The Case of Starbucks. In Business Model Pioneers
(pp. 41-53). Springer, Cham.
Ziliani, C. (2019). GETTING LOYALTY RIGHT: BARILLA
AND STARBUCKS. Loyalty Management: From Loyalty
Programs to Omnichannel Customer Experiences, 18.